“Vodafone has agreed to pay €18.4bn (£16.1bn) for the majority of European assets owned by the US cable giant Liberty Global.
The UK telecoms group said it will buy businesses in Germany, Hungary, Romania and the Czech Republic.
The deal will allow Vodafone to expand its mobile, cable television and broadband services across Europe.
Liberty Global owns Virgin Media, which it plans to retain, as well as its operation in Ireland.
Vodafone said the transaction, which includes Unitymedia in Germany, would create a “converged national challenger” to the “dominant incumbent” in the country.
Deutsche Telekom, which is Europe’s largest telecoms provider by revenue and owns T-Mobile, has strongly objected to the move.
Deutsche Telekom’s chief executive, Timotheus Höttges, said in February that the deal was “completely unacceptable”.
He said: “I do not see that this kind of concentration in the cable market can be supported from regulatory bodies.”
However, Vodafone chief executive Vittorio Colao said on Wednesday that the deal “creates a strong competitor to Deutsche”.
Vodafone already owns the largest cable business in Germany after it acquired Kabel Deutschland for €7.7bn five years ago.
By purchasing Unitymedia, it is acquiring Germany’s second-largest cable operator.
Vodafone’s cable business operates in 13 of Germany’s 16 federal states, while Unitymedia’s operation covers the remaining three states.
Mr Colao said that there was “no geographical overlap” between the two businesses.
Mike Fries, chief executive of Liberty Global, said: “Even together, Liberty Global and Vodafone, whose cable networks don’t compete or overlap, will be half the size of the incumbent operator. It’s time to alter market dynamics by unleashing greater investment and competition.”
Vodafone currently offers only mobile telecoms services in Hungary, Romania and the Czech Republic.
The acquisition of Liberty Global’s cable business means it will be able to expand into TV and broadband services.
As part of the deal, Vodafone will pay Liberty Global €10.6bn in cash, which the US business said would “provide significant additional flexibility to optimise growth and shareholder returns”.
Vodafone has also agreed to a €250m break fee, which would be payable to Liberty Global if the acquisition does not go ahead.”
Source – BBC News